Updates, advisories and surprises

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Friday, August 23

ADC sinks on Q2 results, Q2 warning (3:48 PM ET) ADC
ADCT
is dropping 33 cents, or 19.4 percent, to $1.33, after the Minneapolis telecommunications firm posted a third-quarter pro forma loss of $58 million, or 7 cents a share, a penny wider than the average estimate of analysts polled by Thomson Financial/First Call. The company said that it plans to take additional cost reduction actions in order to reduce its breakeven sales level to below $250 million. These steps will include the close or sale of its optical components business, an end to production of its Avidia DSL Access Multiplexer product, and downsizing in administrative areas. Looking ahead, ADC sees a pro forma loss of 7 to 9 cents a share on revenue of around $200 million for the fourth quarter, wider than Wall Street's current consensus estimate for a loss of 4 cents.

Centerpulse gets lift from strong earnings in 1st half (2:28 PM ET) Centerpulse
CEP, +0.00%
is up $1.51, or 11.6 percent, to $14.50, after the Zurich, Switzerland, medical device firm reported first-half results that met its goal of profitable growth. The company said that net income before exceptional items rose 118.4 percent to CHF 94.8 million. Centerpulse added that it expects to complete the sale of its cardiac and vascular businesses by the end of the year.

Q2 results send Biopure shares lower (2:06 PM ET) Biopure
BPUR
is down $1.44, or 23.4 percent, to $4.71, after the Cambridge, Mass., oxygen therapeutics firm reported a second-quarter loss of $12.6 million, or 43 cents per share, wider than its year-ago loss of $11.9 million, or 47 cents a share, and well beyond the average estimate of two analysts polled by Thomson Financial/First Call for a loss of 34 cents a share. Revenue fell to $260,000 in the latest three months from $946,000 in the same period a year earlier. The company attributed the drop-off to a decrease in veterinary sales of its Oxyglobin products due to low inventory following the expansion and re-validation of its manufacturing facilities.

Lancaster Colony gains following strong Q4 (9:48 AM ET) Lancaster Colony
LANC, +0.57%
is gaining $1.37, or 3.5 percent, to $40.30, after the Columbus, Ohio-based reported fourth-quarter earnings of $25.4 million, or 69 cents a share, up from its year-ago profit of $20.1 million, or 54 cents a share. Excluding a gain of $1.8 million related to liquidation of certain LIFO inventories, the company earned 64 cents, well ahead of Wall Street's consensus estimate for a profit of 56 cents. Sales jumped 11 percent in the latest three months to $282 million from $254 million in the same period a year earlier. Looking ahead, the diversified company, which has specialty food products, glassware, and automotive products, said that it has concerns about the uneven economy and that it expects "modest" growth in sales and net income.

Netro lays off 50, to take charge (8:20 AM ET) Broadband wireless software maker Netro
NTRO
said it'll trim 50 employees for a total head count of 250 as well as write-down fixed assets, which have yet to be determined. The company expects a one-time employment-related charge of $1- to $1.5 million in the third quarter. Shares fell 3 cents to $3.13 on Thursday.

Concurrent Computer tops Q4 profit views (8:13 AM ET) Concurrent Computer
CCUR, -1.41%
is reporting fourth-quarter earnings of $5 million, or 8 cents a share, up from its year-ago loss of $800,000, or a penny per share, and 4 cents ahead of the average estimate of analysts polled by Thomson Financial/First Call. Revenue rose 39.5 percent in the latest three months to $27.8 million from $19.9 million in the same period a year earlier. The Atlanta-based firm, which provides video-on-demand and real-time computer systems, said that it expects earnings of 1 to 2 cents a share for the first quarter, just below Wall Street's current consensus estimate for a profit of 3 cents a share in the period. Despite recent delays in a couple of expected video-on-demand market deployments, Concurrent expects revenue of $13 million to $14 million from this business in the quarter, along with revenue of at least $9 million from its real-time division. The stock closed Thursday at $4.37, up 4 percent.

Thursday, August 22

Borders boosts Q2 profits as sales rise 3.2 percent (5:00 PM ET) Bookseller Borders Group on Thursday reported a higher second-quarter profit from a year ago, as management leveraged a modest increase in revenue and cost-cutting efforts to beat Wall Street's expectations. The retailer
BGP, -1.22%
made $3.4 million, or 4 cents a share, in the quarter, beating by a penny the average estimate of analysts polled by Thomson Financial/First Call. Last year, the company earned $100,000, or less than a penny a share. Revenue came to $763.6 million in the quarter. Comparable store sales at location open at least a year fell by 1 percent. However, Borders said it expects to lose 2 to 3 cents in the third quarter; Wall Street was expecting break even. But the fourth quarter will exceed Street estimates of $1.40, with the company now projecting profits of $1.41 to $1.45. For the full year, Borders foresees profits of $1.45 to $1.49 vs. analysts' forecast of $1.49. The company will be certifying its financial results by the Sept. 11 deadline. Shares of Borders close down 4.6 percent to $18.30 on Thursday.

Riverstone to lay off 30% of staff, warns on Q2 (4:39 PM ET) Networking equipment company Riverstone Networks
RSTN
said Thursday it would lay off 30 percent of its approximately 525-person workforce, and its second-quarter loss would be greater that analysts' estimates. Riverstone issued a preliminary earnings reports for the quarter ending August 31, saying that it expects a pro forma loss of between 18 cents and 24 cents a share. Analysts surveyed by Thomson Financial First Call estimated Riverstone to lose 11 cents a share.

TiVo posts Q2 loss, ups revenue outlook (4:26 PM ET) TiVo, a developer of Personal Video Recorder software, on Thursday evening reported a much smaller second-quarter loss than it did in the same quarter last year on improved licensing revenue and sales of TiVo units, and upped its revenue projections for the full-year. TiVo said it lost $3 million, or 6 cents a share, compared to a deficit of $34.5 million, or 82 cents, in the year-ago period. On average, analysts surveyed by Thomson Financial/First Call were expecting a loss of 18 cents in the latest quarter. Revenue soared to $23.9 million from $4 million; respondents to First Call foresaw a figure of $23 million. TiVo now sees revenue for the full year coming in at $57 million to $62 million; the typical analyst forecast was $58.6 million. Shares
TIVO, +0.83%
rose 8 percent to $4.50 in after-hours trading on the Island ECN.

Novell narrowly tops targets (4:12 PM ET) Shares of Novell
NOVL
moved up 16 cents in the extended session from a close of $2.09 Thursday after the software firm reported a third-quarter profit of 3 cents a share, a penny ahead of expectations. Revenue also beat Wall Street estimates of $275 million, coming in at $282 million. Novell cited better than anticipated business in Europe as an important factor in the quarter.

Lennox backs FY view; knows of no reason for drop (3:30 PM ET) Lennox International
LII, +1.84%
is out with a press release in response to inquiries from shareholders about the unusual activity in its stock. The shares are off $1.79, or 10 percent, to $16.06, on heavy volume of 1.81 million. In the release, the Dallas provider of heating, ventilation, and air conditioning products reaffirmed its outlook for earnings before items of 90 cents to $1 per share for the full year, and free cash flow of $75 million. It also said it knows of no corporate activity or developments that would account for the slide in its share price.

Wet Seal tumbles on Q2 results, outlook (2:49 PM ET) The Wet Seal
WTSLA
is losing $1.27, or 10.3 percent, to $11.05, after the company reported second-quarter earnings that missed Wall Street's consensus estimate and lowered its outlook for the second half. The company posted a profit for the period of $3.7 million, or 12 cents a share, a penny short of analysts' views. Sales rose to $146.2 million in the latest three months from $135.6 million in the same period a year earlier. Same-store sales advanced 1.6 percent in the period. The Foothill Ranch, Calif., fashion apparel retailer attributed the shortfall to a significant reduction in its overall bottom business due to a lack of selection of seasonal bottoms, the elimination of a tax-free promotion in Florida, and the late 'back-to-school' season in Texas.

Synopsys gets slight boost from Q3 results (12:47 PM ET) Synopsys
SNPS, +0.36%
is tacking on $1.10, or 2.5 percent, to $45.10, in midday action. After Wednesday's closing bell, the company posted third-quarter earnings before items of $39.7 million, or 53 cents a share, 3 cents ahead of Wall Street's consensus estimate. Revenue rose to $236.1 million in the latest three months from $176.1 million in the same period a year earlier. On a GAAP (generally accepted accounting principles) basis, Synopsys lost $137.6 million, or $1.93 per share, in the period. Looking ahead, the company forecast a strong performance for the remainder of the year but withdrew its outlook for fiscal 2003 due to the continued difficult economic environment and recent reductions in estimates for capital spending by semiconductor companies.

Pharmacyclics surges on trial progress, Q4 results (12:25 PM ET) Pharmacyclics
PCYC
is up 27 cents, or 9.4 percent, to $3.13, after the company reported its quarterly results, and disclosed progress in its development of its lead anti-cancer product, Xcytrin. For the fourth quarter ended June 30, the Sunnyvale, Calif., firm posted a loss of $7.3 million, or 45 cents a share, 7 cents narrower than the average estimate of analysts polled by Thomson Financial/First Call. As for Xcytrin, the company said that, based on its recent meeting with the Food and Drug Administration, it's able to move forward with plans to begin a phase 3 clinical trial of the drug to confirm already observed clinical benefits. In particular, the FDA said the trial's primary endpoint - the timing of neurologic progression - is an approvable endpoint.

Ansoft misses Q1 loss view by wide margin (11:30 AM ET) Ansoft
ANST
is falling 74 cents, or 15.3 percent, to $4.09, after the Pittsburgh developer of electronic design automation software reported a first-quarter loss of $3.3 million, or 28 cents a share, wider than its year-ago loss of $498,000, or 4 cents a share, and well beyond the average estimate of four analysts polled by Thomson Financial/First Call for a loss of a nickel per share. The company said it was "clearly disappointed" in the results. Sales fell 17 percent in the quarter to $9.3 million.

Q4 report sends Acres Gaming shares higher (11:18 AM ET) Acres Gaming
AGAM
is up 64 cents, or 12.7 percent, to $5.69, after the Las Vegas gaming technology firm reported fourth-quarter earnings of $3 million, or 29 cents a share, up from its year-ago profit of $1.7 million, or 16 cents a share. The latest results were a penny ahead of the average estimate of two analysts polled by Thomson Financial/First Call. Revenue, however, dropped to $9.3 million in the three months ended June 30 from $13.6 million in the prior year quarter. The company noted that gross margin jumped to 66 percent in the period from 35.2 percent a year earlier due to an increased percentage of revenue coming from software sales and royalty fees, which carry higher margins than Acre's hardware products.

Restoration Hardware meets own loss view (10:58 AM ET) Restoration Hardware
RSTO
is adding 64 cents, or 14.4 percent, to $5.08, after the Corte Madera, Calif., specialty retailer posted a second-quarter loss of $3.6 million, or 12 cents a share, narrower than its year-ago loss of $6.9 million, or 30 cents a share. The latest results met the company's earlier projections. Sales leapt 12 percent to $85 million in the latest three months from $75.9 million in the same period a year earlier. Same-store sales rose 8.9 percent in the quarter. Looking ahead, Restoration said that it expects to meet its outlook for the remainder of fiscal 2002. It anticipates same-store sales growth in the 12 to 15 percent range in the third quarter.

American Business gets boost from Q4 profit (10:38 AM ET) American Business Financial Services
ABFI
is gaining $3.30, or 33 percent, to $13.30, after the Bala Cynwyd, Pa., financial services firm reported fourth-quarter earnings of $2.3 million, or 83 cents a share, up from its year-ago profit of $1.5 million, or 46 cents a share. Revenue jumped in the latest three months to $71.8 million from $53.1 million in the same period a year earlier. In addition, the company said that its board has declared a 10 percent stock dividend and a quarterly cash dividend of 8 cents per share for shareholders of record as of Sept. 3.

Belo gets lift from July revenue performance (10:24 AM ET) Belo
BLC, +0.00%
is adding $1.82, or 8.1 percent, to $24.33, after the Dallas media firm reported that revenue for its television group jumped 10 percent in July to $48.6 million. Revenue for the company's newspaper group slipped 5.5 percent in the month to $55.8 million.

J.D. Edwards surges on better than anticipated Q2 (9:50 AM ET) J.D. Edwards
JDEC
is gaining $1.60, or 13.5 percent, to $13.40, after the Denver business software reported third-quarter pro forma earnings of $10 million, or 8 cents a share, up from its year-ago equivalent loss of $3 million, or 3 cents a share, 2 cents ahead of the average estimate of analysts polled by Thomson Financial/First Call. Revenue jumped 9 percent to $229 million in the latest three months from $209 million in the same period a year earlier.

Stage Stores comes in 6c short of Wall St. view (9:44 AM ET) Stage Stores
STGS
is falling $2.85, or 11.6 percent, to $21.90, after the Houston family apparel retailer posted second-quarter earnings of $10.4 million, or 47 cents a share, missing Wall Street's consensus estimate by six cents. Sales rose 6.1 percent in the latest three months to $207.5 million from $195.5 million in the same period a year earlier. Same-store sales jumped 6.5 percent in the quarter. Looking ahead, however, Stage Stores said it remains comfortable with the upper end of its previously disclosed outlook for earnings of $2.58 to $2.62 per share for the year.

Alloy slides after Q2 miss, downgrade (9:37 AM ET) Shares of Alloy
ALLOY
are sliding $30, or 12 percent, to $9.90 after Jefferies analyst Barbara Coffey downgraded the teen-targeted marketing company to "sell" from "buy," following the company's report late Wednesday of a breakeven fiscal second quarter, while consensus analyst expectations were for earnings of 3 cents a share. Coffey also cited concerns over demographics and acquisitions. She noted that growth in its demographic -- 10 to 24 year olds -- peaked in 2001, and that the three acquisitions made since February failed to meet its trailing EBITDA (earnings before interest, taxes, depreciation and amortization) parameters. Coffey has a $6.20 price target on the shares.

ShopKo Stores tops Q2 view by 4c (9:20 AM ET) ShopKo Stores
SKO, +3.69%
is reporting second-quarter earnings of $7.2 million, or 25 cents a share, 4 cents ahead of Wall Street's consensus estimate. Sales slipped in the latest three months to $783.4 million from $791.2 million in the same period a year earlier. Same-store sales slipped 0.6 percent in the quarter. Looking ahead, the Green Bay, Wis., specialty discount retailer sees a loss of 8 to 12 cents a share in the third quarter, and earnings of $1.35 to $1.45 per share for the full year. This loss estimate for the third quarter is wider than the average estimate of analysts polled by Thomson Financial/First Call for a loss of 6 cents a share, but the profit outlook for the full year is in line with the consensus view of $1.43 per share.

Novartis gets priority review for anti-cancer drug (9:03 AM ET) Novartis said Thursday that the U.S. Food and Drug Administration had granted priority review status to an application to expand use of anti-cancer drug Gleevec. By granting priority review, the FDA commits to making a decision within six months. Gleevec was approved more than a year ago for treating a type of leukemia when the disease is in its later stages. Swiss-based Novartis is seeking clearance to market the drug for use in the earlier stages of the disease. Ahead of the news, U.S.-listed shares of Novartis
NVS, -0.36%
added 74 cents to $42.19 Wednesday.

Men's Wearhouse misses in Q2; sees FY below views (9:01 AM ET) Men's Wearhouse
MW
is reporting second-quarter earnings of $7.8 million, or 19 cents a share, down from its year-ago profit of $10.3 million, or 25 cents a share, and a penny short of Wall Street's consensus estimate. Sales edged 3.8 percent higher to $308.6 million in the latest three months from $297.2 million in the same period a year earlier. Looking ahead, the Fremont, Calif., men's apparel retailer forecast sales of $315 million to $317 million in the third quarter, and $435 million to $437 million in the fourth quarter. Same-store sales for both quarters are projected to rise in the mid to high single digit range for both the U.S. and Canada. Men's Wearhouse also lowered its outlook for the second half, projecting earnings of 25 to 26 cents a share in the third quarter and $1.30 to $1.32 per share for the full year. Wall Street's current consensus estimates for the periods are for profits of 37 cents and $1.44 per share, respectively.

Barnes & Noble trims 2002 profit target (8:56 AM ET) Barnes & Noble
BKS, +2.44%
posted second-quarter earnings of $1.4 million, or 2 cents per share, vs. a loss of $1.7 million, or 3 cents per share in the year-ago period. Total sales were $1.16 billion, up 10.4 percent. Comparable book store sales increased 0.3 percent. Barnes & Noble lowered its second half comparable store sales forecast to 2- to 3 percent, down from 4- to 5 percent. The book and music retailer also trimmed 2002 guidance to $1.76 per share, prior to the impairment charge taken in the first quarter. The currenct forecast is $1.83 per share. Barnes & Noble stock rose 39 cents to $23.43 on Wednesday.

Whitehall Jewelers meets Wall St. views in Q2 (8:51 AM ET) Whitehall Jewelers
JWL
is reporting second-quarter earnings of $571,000, or 4 cents a share, up from a year-ago loss of $643,000, or 4 cents a share, and in line with the average estimate of analysts polled by Thomson Financial/First Call. Sales rose to $76.2 million in the latest three months from $74.4 million in the same period a year earlier. The stock closed Wednesday at $12.50, up 3.7 percent.

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